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Bailout bill is law
President Bush signed the bailout bill into law shortly after the House passed the revised version of $700 billion plan in a vote of 263 to 171. intended to bolster the ailing U.S. financial system. The House rejected the original bill on Monday, sending stocks tumbling around the world. President Bush signed the bailout bill into law shortly after the House passed the revised version of $700 billion plan in a vote of 2... more
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Ron Paul: Corporatism - not free markets
Mostly explains it self. Ron Paul atleast knows what he is talking about when it comes to economics.
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Kucinich: Bailout 'driven by fear not fact'
Ohio congressman Dennis Kucinich suggested the $700 billion bailout package was sending America towards 'casino socialism, where the only real product is debt'. Ohio congressman Dennis Kucinich suggested the $700 billion bailout package was sending America towards 'casino socialism, where ... more
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America's No. 1 Export: Debt - TIME
Japan and Germany make cars. Saudi Arabia pumps oil. China supplies the world with socks and toys and flat-screen TVs. What does the United States produce? Lots of stuff, but in recent years this country's No. 1 export--by far--has been debt. Japan and Germany make cars. Saudi Arabia pumps oil. China supplies the world with socks and toys and flat-screen TVs. What does the U... more
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Watch REP. Peter DeFazio drop the "Financial Crisis BS bomb" on the Hou...
Find out a little about this $700B biil, who the Treasurer is, where we are gonna get the money, how much time do we have? Watch, think, and discuss. Find out a little about this $700B biil, who the Treasurer is, where we are gonna get the money, how much time do we have? Watch, thin... more
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Japanese securities firm Nomura buys Lehman Brothers European investments
Nomura Holdings Inc., Japan's biggest securities firm, agreed to buy Lehman Brothers Holdings Inc.'s investment banking and equities unit in Europe, saying it would keep on most of the firm's 2,500 employees in London.
The Tokyo-based bank will pay a ``nominal'' amount for Lehman's European operations, Nomura Special Adviser Sadeq Sayeed told reporters on a conference call today. He declined to be more specific. The purchase follows Nomura's $225 million takeover yesterday of Lehman's Asian-Pacific unit.
The turmoil in the financial markets over the past 11 days is giving Asian banks an opportunity to seize global market share. Mitsubishi UFJ Financial Group Inc., Japan's largest bank, plans to buy 20 percent of Morgan Stanley for $8.4 billion. Nomura President Kenichi Watanabe is now restarting an overseas push that was rolled back by his predecessor in 2007, as losses on U.S. mortgage investments mounted.
Read full story at link. Nomura Holdings Inc., Japan's biggest securities firm, agreed to buy Lehman Brothers Holdings Inc.'s investment banking and ... more -
So-called "Treasury rescue" hits more obstacles
It's really interesting to see how people are responding to the various iterations of this bill so far. Hopefully there is enough opposition to make something constructive happen, instead of another $700 billion poison pill...
From the article:
"The biggest financial bailout in American history hit a speed bump Tuesday on Capitol Hill as members of the Senate began to balk at quick action to pass the measure, saying such a massive proposal requires more careful discussion and consideration.
While there was no sense that the plan, authored by Treasury Secretary Henry Paulson, was yet in peril, Senators suggested at a hearing with Paulson, Federal Reserve chairman Ben Bernanke and other top regulatory officials that the measure would not be completed by the end of the week..."
Read full story at link.
A few other trailing stories on this one:
(Treasury bill analysis) http://www.afterdowningstreet.org/node/36200
(Proposed text) http://money.cnn.com/2008/09/20/news/economy/treasury_p...
("Official people" comments on bill/plan) http://www.politico.com/arena/ It's really interesting to see how people are responding to the various iterations of this bill so far. Hopefully there is enough... more -
Treasury Now Wants to Bailout FOREIGN Banks
Treasury Secretary Henry Paulson called coverage of foreign banks "a distinction without a difference to the American people." Continuing: "If a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people..." Treasury Secretary Henry Paulson called coverage of foreign banks "a distinction without a difference to the American people.... more
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Freddie Mac and Fannie Mae taken over by our government
The government has announced that it will take over Freddie Mac and Fannie Mae because they have become so financially weakened that they are unable to support the housing market. Treasury Secretary Henry M. Paulson Jr. has come up with a plan to hopefully save Freddie Mac and Fannie Mae by having the Treasury involved, giving them up to $100 billion each over time. Not only that, the Treasury will buy some of the mortgaged-backed bonds, essentially taking home loans into it's own booking. Current shareholders won't have their shares canceled but the value will be completely wiped out.
Read more at the link.
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What is everybody's take on this? Any opinions? The government has announced that it will take over Freddie Mac and Fannie Mae because they have become so financially weakened that t... more -
Fannie and Freddie symptoms of larger problem
AFL-CIO economist says this system amounts to "Socialism for the rich and capitalism for the poor".
The Federal Reserve and the Treasury announced steps on Sunday to shore up mortgage giants Fannie Mae and Freddie Mac, whose shares have plunged as losses from their mortgage holdings threatened their financial survival. Congress has been asked to approve a sweeping rescue package that would inject billions of federal dollars into the the faltering companies. Separately, the Federal Reserve said that it would promote up to $300 billion dollars of short-term low interest loans to Fannie and Freddie. AFL-CIO chief economist, Ron Blackwell, emphasized both the need to bail out Fannie and Freddie and the urgency of addressing the systemic problems that produced their collapse. He says that the current system amounts to Socialism for the rich and Capitalism for the poor.
Ron Blackwell is Chief Economist for the AFL-CIO, where he has also worked as Director of Corporate Affairs. Before coming to the AFL-CIO, Blackwell was assistant to the president of the Amalgamated Clothing and Textile Workers Union, and chief economist of UNITE (Union of Needletrades, Textiles and Industrial Employees). Prior to joining the labor movement, Blackwell was an academic dean at the New School for Social Research in New York (now the New School University), where he taught economics, politics and philosophy. AFL-CIO economist says this system amounts to "Socialism for the rich and capitalism for the poor". ... more -
Dude approaches the Treasury with $5.2 million in decaying bills
The businessman arrived at the Treasury Department carrying a suitcase stuffed with about $5.2 million. The bills were decomposing, nearly unrecognizable, and he asked to swap them for a cashier's check. He said the money came from Mexico.
Money like this normally arrives in an armored truck or insured shipping container after a bank burns or a vault floods. It doesn't just show up at the visitor's entrance on a Tuesday morning. But the banking habits of Franz Felhaber had stopped making sense to the government long ago.
For the past few years, authorities say, he and his family have popped in and out of U.S. banks, looking to change about $20 million in buried treasure for clean cash.
The money is always the same _ decaying $100 bills from the 1970s and 1980s.
It's the story that keeps changing:
_It was an inheritance.
_Somebody dug up a tree and there it was.
_It was found in a suitcase buried in an alfalfa field.
_A relative found a treasure map. The businessman arrived at the Treasury Department carrying a suitcase stuffed with about $5.2 million. The bills were decomposing, ne... more -
Record '09 Deficit of $482 Billion
White House forecasts deficit of $389 Billion in 2008
The Bush administration forecasts the nation's budget deficit will hit $389 billion this year, increasing to a record $482 billion next year, reflecting shrinking tax revenue brought on by a weakened economy.
The projected budget shortfall in the fiscal year ending Sept. 30 is $21 billion less than President George W. Bush forecast five months ago while next year's shortfall is expected to come in 18.4 percent higher than the $407 billion in the earlier projection.
``These projected deficits are both manageable and temporary if spending is kept in check, the tax burden remains low and the economy continues to grow,'' White House Budget Director Jim Nussle said in the report delivered to House Speaker Nancy Pelosi, Democrat of California.
``Despite the recent slower economic growth'' brought on by declines in the housing market, disruptions in the credit markets and higher food and energy prices, ``the nation's economy has continued to expand and remains fundamentally resilient,'' the report said.
Even so, the White House lowered its forecast for U.S. economic growth this year and next. The budget office said the gross domestic product is being reduced to a 1.6 percent rise this year, compared with a 2.7 percent increase estimated five months ago.
Next year, the economy may expand 2.2 percent, instead of the 3 percent increase projected in February. White House forecasts deficit of $389 Billion in 2008 ... more -
Ron Paul comments on the Housing Bill or "The Mother Of All Bailouts"
In addition to throwing economic fundamentals out the window, Paul points out the peculiarities that mortgage brokers must now be fingerprinted and that credit card transactions will now be reported to the I.R.S. CONgress ≠ PROgress.
The following is excerpted from Congressman Paul's Statement on H.R. 3221:
"Madam Speaker, For several years, followers of the Austrian school of economics have warned that unless Congress moved to end the implicit government guarantee of Fannie Mae and Freddie Mac, and took other steps to disengage the US Government from the housing market, America would face a crisis in housing. This crisis would force Congress to chose between authorizing a taxpayer bailout of Fannie and Freddie, and other measures increasing government’s involvement in housing, or restoring a free-market in housing by ending government support for Fannie and Freddie and repealing all laws that interfere in housing. The bursting of the housing bubble, and the recent near-collapse in investor support for Fannie and Freddie has proven my fellow Austrians correct. Unfortunately, but not surprisingly, instead of ending the prior interventions in the housing market that are responsible for the current crisis, Congress is increasing the level of government intervention in the housing market. This is the equivalent of giving a drug addict another fix, which will only make the necessary withdrawal more painful.
The provision giving the Treasury Secretary a blank check to purchase Fannie and Freddie stock not only makes the implicit government guarantee of Fannie and Freddie explicit, it represents another unconstitutional delegation of Congress’ Constitutional authority to control the allocation of taxpayer dollars. While the Treasury Secretary has to file a report with Congress, the lack of any effective standards for the expenditure of funds makes it impossible for Congress to perform effective oversight on Treasury’s expenditures.
HR 3221 also takes another troubling step toward the creation of surveillance state by creating a Nationwide Mortgage Licensing System and Registry. This federal database will contain personal information about anyone wishing to work as a “loan originator.” “Loan originator" is defined broadly as anyone who "takes a residential loan application; and offers or negotiates terms of a residential mortgage loan for compensation or gain." According to some analysts, this definition is so broad as to cover part-time clerks and real estate agents who receive even minimal compensation from "originators." Additionally, this database forced on industry will be funded by fees paid to the federal banking agencies, yet another costly burden to the American taxpayers.
Among the information that will be collected from loan originators for inclusion in the federal database are fingerprints. Madam Speaker, giving the federal government the power to force Americans who wish to work in real estate to submit their fingerprints to a federal database opens the door to numerous abuses of privacy and civil liberties and establishes a dangerous precedent. Fingerprint databases and background checks have been no deterrent to espionage and fraud among governmental agencies, and will likewise fail to prevent fraud in the real estate market. I am amazed to see some members who are usually outspoken advocates of civil liberties and defenders of the Fourth Amendment support this new threat to privacy."
(End of excerpt)
Full transcript of Congressman Paul's Statement
http://www.house.gov/paul/congrec/congrec2008/cr072408h...
For more information on H.R. 3221 please visit THOMAS (The Library of Congress)
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.03221: In addition to throwing economic fundamentals out the window, Paul points out the peculiarities that mortgage brokers must now be fing... more -
Fed Seeks Sweeping New Powers
Federal Reserve Chairman Ben S. Bernanke, seeking to allay renewed concerns over the health of the nation's financial system, said the central bank may extend its emergency-loan program for investment banks into next year.
It's the first time Bernanke has indicated how long he'll extend the lending programs that were introduced in March in a provision of Fed credit to nonbanks unprecedented since the Great Depression.
The Standard & Poor's 500 Banks Index, a measure of 22 firms including Fannie Mae and Freddie Mac, the largest sources of U.S. home financing, fell to 155.48 yesterday, its lowest level since 1996.
Mean while the Fed is using this as an excuse to extend the powers of its agency
{source http://www.marketwatch.com/news/story/bernanke-seeks-ne...={7DFB82A4-1E02-4F50-B445-B8E68B8E0EFD}&dist=msr_4
Congress should consider giving the Fed power to set standards for capital liquidity holdings and risk management for investment banks, as it now does for commercial banks, Bernanke said.
In March, as market conditions worsened, the Fed established two lending facilities for primary dealers of government debt. One allows them to swap a range of illiquid assets for Treasury securities. The other facility provides cash to these broker-dealers in a system that is similar to its discount window for banks.
Bernanke said Congress might give the Fed broad power to promote financial market stability.
If Congress makes this choice, "I do not think the Fed could fully meet these objectives without the authority to directly examine banks and other financial institutions that are subject to prudential regulation.
Increased power for one agency typically comes at the expense of other agencies that have their own strong alliances with powerful members of Congress.
Although Treasury Secretary Henry Paulson has said that he would like to see Congress give the Fed more power to ease the fallout of financial market turmoil on the economy, it is another matter for an agency to be seen as seeking power for itself.
As a result, Bernanke bent over backwards to suggest, rather than demand, that the Fed get the broad new regulatory responsibilities he seeks, though his desire for the new powers was apparent. "
Two-year note yield rose (UST2YR) 3 basis points to 2.46%.
{source http://money.cnn.com/news/newsfeeds/articles/djhighligh... Federal Reserve Chairman Ben S. Bernanke, seeking to allay renewed concerns over the health of the nation's financial system, sai... more -
Money is Discriminating
The U.S. Court of Appeals ruled Tuesday that the current U.S. currency discriminates against the blind.
"The decision could force the Treasury Department to make bills of different sizes or print them with raised markings or other distinguishing features." The U.S. Court of Appeals ruled Tuesday that the current U.S. currency discriminates against the blind. ... more -
6,000 people blackballed by the Treasury Department in the name of terrorism
If you're interested in the 6000 people who have been blackballed by the treasury department in the name of terrorism, you can see the list yourself. There's currently a law suit against the treasury from a number of people who've been denied loans, etc. because they are on this list: If you're interested in the 6000 people who have been blackballed by the treasury department in the name of terrorism, you can se... more
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Great Depression to Come Again?
Sinister outcasts from Princeton's economist Krugman - He expects the US housing market to drop 25% overall.
"I'm not one of those people who thinks the Great Depression is coming back, but there's lots of echoes. [...] I think we know more than we did then, and just the fact that we have a big federal government is a stabilizing factor. But the current problem is still pretty awesome."
At the same time, he admits that "what we're having looks like a minor-key version of the bank failures in the early 1930s. Now it's mostly not banks, it's markets that were serving the function of banks and institutions that were doing banklike stuff, and it's not as bad - at least so far. But it's a question. If we were actually having a string of bank failures, then we would know what to do. The government would essentially seize the banks and guarantee the deposits. But what do you do when you have a wave of failures of things like the auction-rate securities market, which was effectively a funny way of doing banking? If you look historically at other financial crises, they typically end up with big government bailouts. But how's that going to work in this case? We don't even know who to bail out. And part of the problem is we don't even know who owes what to whom."
I am wondering if today they really know more about troubles in the financial markets than in the 30's. The situation seems to be very different today - notwithstanding the perplexity about the economy's inner workings, which then as now seems do dominate. Not comforting, I would say...
What do you think? Sinister outcasts from Princeton's economist Krugman - He expects the US housing market to drop 25% overall. ... more -
US housing prices are the 'most significant current risk'
According to US Treasury Secretary Henry Paulson. Not just the subprime collapse, folks, the whole goshdarned housing market.
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i want a $100 billion support fund too!!!
U.S. banks are meeting with U.S. Treasury officials to create a $100-billion fund to stave off the danger that there could be a fire sale of shaky mortgage-backed securities and other distressed assets.
great...let's reward the banks for selling mortgages and securities that shouldn't have been sold in the first place.
I don't see how this is a solution for the problem... U.S. banks are meeting with U.S. Treasury officials to create a $100-billion fund to stave off the danger that there could be a fire s... more
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